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On Nontraditional Trademarks

This piece regards nontraditional trademarks like sound, color, scent or even the vertical opening motion of a Lamborghini car door. The protection of trademarks has, historically, walked a fine balance. Naturally, as a society, we want to protect trademarks so that transaction costs are lowered as purchasers make a quick and easy purchasing decision. You see Tide, you know Tide, you buy Tide. However, the protection of nontraditional trademarks upsets this fine balance. If we go too far in the protection we grant unwarranted monopolies to companies to stifle the precise competition the law was meant to encourage. Sometimes, we do not have to protect a trademark claimant to recognize the savings in search costs. In fact, nontraditional trademarks are ornamental, at best, and, at worst, a horrible distraction from the larger job of substantive harmonization so that the transactions costs might be lessened for all companies around the world.

This article traces the origins of this protection and concludes that nothing in our history predicts or requires this protection. One Supreme Court decision in 1995 open the floodgates for trademark application activity, but litigation rates did not, correspondingly, increase. I relied on a study I did of all 2,762 reported trademarks decisions from the inception of the Lanham Act (the US trademark law) through 2007. I coded every case. The numbers are reported in this article. Trademark registration activity is still very small and litigation activity is near nonexistent.

However, the United States requires potential trading partners to protect nontraditional trademarks or we will not enter into bi-lateral trade agreements. We have encouraged the World Intellectual Property Organization to conduct a massive study on the protection of nontraditional marks. Based on this flawed study, some countries are now contemplating amending their trademark laws to explicitly recognize nontraditional trademarks.

This is a cause without an objective. People generally believe that America routinely protects nontraditional trademarks. My data indicates that this is not the case. Then, countries are attempting to harmonize to the standard of protecting nontraditional trademarks thinking that is required in the United States when it is not.

In the end, this provides an amazing distraction to the greater goal of harmonizing trademark laws. Civil Law countries believe they are harmonizing to an international standard of trademark law when that standard is a fiction created by the United States (without malice). Instead of working on far more important goals that have remained elusive for 120 years and without concern to harmonizing the underlying theory of trademark protection, countries are focusing efforts on protecting the motion of a Lamborghini door.

My argument is that this is unfortunate. We should understand the distinctions between the two systems and work to close that gap in a meaningful way. No matter how many countries protect the motion of a Lamborghini door opening, without harmonizing the underlying theory and without addressing real issues, real harmonization will remain elusive.